Image Source: Pixabay
 

Pinterest's shares climbed in Monday's premarket after RBC Capital analysts hiked their price target on the stock to $46.

Analysts at RBC Capital raised their price target on Pinterest’s stock (NYSE: PINS) to $46 from $32, sending the company’s shares rising 3.3% in Monday’s premarket. Pinterest has delivered a robust performance in 2023, driven by strong earnings reports and a stabilizing advertising market. 
 

RBC Capital Bullish on Pinterest, Citing Seismic Long-Term Platform Changes

Shares of Pinterest rose around 3.3% in premarket trading Monday after RBC Capital analyst Brad Erickson upgraded the stock from Sector Perform to Outperform. Also, the strategist raised the price target on PINS from $32 to $46, implying a potential upside of more than 30% from its current price. 

The move comes amid strong investor interest for non-megacap stocks in 2024, and Pinterest “stands out as a way to play the shift of intent-based ad platforms chasing impulse shopping’s $241B ad spend,” RBC Capital analysts wrote in the note.

“Liked by the sell-side but under-owned by the buy-side, we believe PINS is an attractive story underpinned by checks indicating key product cycles starting to work, positive ad load analysis, attractive comps, and is a less consensus/partially hedged way to play AMZN”. 

– RBC Capital analysts said in their note.

On the flipside, Erickson said that monthly active user (MAU) growth and the rate of ad spending changes represent the two most significant risks to RBC’s bull case. Despite those concerns, the investment firm added it wants to own the potentially game-changing long-term platform changes Pinterest’s management is making. 
 

PINS up 52% YTD; No ‘Sell’ Ratings on the Stock

RBC’s bullish upgrade on Pinterest’s stock comes from a strong market performance for the social media platform.

Surging more than 52% year-to-date, PINS has outperformed the AI-driven S&P 500 index, which gained around 20% during that period. The company’s rally accelerated significantly following its latest earnings report in late October. 

Notably, Pinterest reported financial results for the fiscal Q3 2023 that beat Wall Street’s top and bottom lines estimates. The company generated adjusted earnings per share (EPS) of 26 cents, topping the consensus estimates of 20 cents. Revenue came in at $763.2 million, up 11% year-over-year, beating the projected $743.5 million. 

According to Street Insider data, Wall Street analysts remain largely bullish on the stock, with 31 ‘buy’ and 13 ‘natural’ ratings. No strategists issued a ‘sell’ rating on PINS, while the average price target on the stock sits at $35.28. 

More By This Author: